RECENT DEVELOPMENTS IN GST

[Dr. Sanjiv Agarwal]

The growth in manufacturing sector activities in last few months and rise in GST collections in October – November 2021 hint at continuing economic recovery in Q3 of  the current fiscal. Economic revival is indicated in term of Purchasing Managers Index (PMI), merchandise exports, GST collection, improvement in hiring etc.

The increase in manufacturing activities has a multiplier effect including job creation. Revenue from imports have increased by 43% in November, 2021 which is a good indicator. Increased tax compliances along with enhanced investigations and curbs on tax evasion have contributed to GST tax revenue in November, 2021, which is the second highest since GST was introduced in the country.

The GST revenues for November 2021 have been the second highest ever since introduction of GST, second only to that in April 2021, which related to year-end revenues and higher than last month’s collection, which also included the impact of returns required to be filed quarterly. This is very much in line with the trend in economic recovery. It can only be expected that GST collections will improve further given the GDP growth, rationalization of tax rates and exemptions, widening of tax base, liquidity and festive season / new year ahead. All in all, Q3 of 2021 may end better.   

CBIC’s outgoing Chairman, Mr. Ajit Kumar has expressed his parting Sentiments-  “We are seen not merely as Revenue Collectors but as having a bigger role in the Government's scheme of citizen centric initiatives and service delivery. We must make good of these opportunities to reach out and interact with citizens/taxpayers, especially youth, to understand what are their expectations from the government and frame our service responses accordingly. If calibrated and done well it could metamorphose our service into a useful tool of governance much beyond tax collection.” The crux of taxation, it should be. The Government has appointed Mr. Vivek Jhori, IRS as new Chairman of CBIC w.e.f. 01.12.2021.

National Anti-profiteering Authority – Term extended

• CBIC has extended the tenure of National Anti-profiteering (NAA) by one more year, i.e. for fifth year
• Necessary amendments have been made in Rule 137 of CGST Rules, 2017 to the effect that tenure of NAA shall be for a period of five years as per amendment made w.e.f. 30.11.2021 vide CGST (9^th Amendment) Rules, 2021.
• This, NAA shall be functional for one more year w.e.f. 30.11.2021

(Source: Notification No. 37/2021-Central Tax dated 01.12.2021)

Changes made in GST DRC-03

Following changes have been made in GST-DRC-03 form vide CGST Rules (9^th Amendment) Rules, 2021:

• In the heading, after the words “or statement”, the words, letters and figures “or intimation of tax ascertained through FORM GST DRC-01A” has been inserted.
• Against item 3, in column (3), for the word and letters “Audit, investigation, voluntary, SCN, annual return, reconciliation statement, others (specify)”, the words, letters, figures and brackets “Audit, inspection or investigation, voluntary, SCN, annual return, reconciliation statement, scrutiny, intimation of tax ascertained through FORM GST DRC- 01A, Mismatch (Form GSTR-1 and Form GSTR-3B), Mismatch (Form GSTR-2B and Form GSTR-3B), others (specify)” has been substituted.
• Against item 5, in column (1), after the word and figures “within 30 days of its issue”, the words, letters, figures and brackets “, scrutiny, intimation of tax ascertained through Form GST DRC-01A, audit, inspection or investigation, others (specify)” have been inserted.
• These amendments are effective from 1^st December, 2021

(Source: Notification No. 37/2021-Central Tax dated 01.12.2021)

Scrutiny of GST returns under section 61 of CGST / SGST Act, 2017

Kerala GST has identified risk parameters and defects to ensure uniformity in scrutiny of returns and prioritize / dispose of the cases. 

• Risk parameters flags :

• ASMT13 - Return within 30 days
• ITC utilisation greater than 5 times cash
• Turnover above 1crore cash nil
• Turnover above 60 percent
• 2A-3B ITC Comparison
• GSTR9-8D Difference
• ITC availed after due date
• Capital goods ITC vs Exempted turnover
• GSTR-1 Vs GSTR 3B mismatch
• GSTR 3B Vs E-way bill
• Turnover less than TDS and TCS

• The first four parameters may require detailed enquiry / investigation
• The Circular contains detailed instructions / guidelines regarding procedure to be followed in scrutiny of returns.

(Source: Circular No. 7/2021 dated 07.11.2021  by issued by KGST Department,  Government of Kerala)

Instructions on electronic E-way Bills / Tax invoices

• The GST law does recognize the making availability of tax invoice or bill of supply or delivery note in an electronic format for the purpose of the TNGST Act, 2017.

• The person in-charge of a conveyance has to carry an E-way bill and Invoice or bill of supply or delivery challan, either in physical or electronic form. The person in-charge of a conveyance, on demand of the Roving Squad Officer, shall produce:

1. E-way bill, either physically or electronically, or the e-way bill number alone, to substantiate that, the e-way bill was generated prior to commencement of movement of goods.
2. Invoice or bill of supply or delivery challan, as the case may be, either physically or electronically. In case of production of invoice or bill of supply or delivery challan, electronically, it may be shown in email, or in whatsapp or such other applications, in mobile phone or such other electronic devices, to clearly indicate that, the person in charge of the conveyance has received the document, prior to the commencement of movement of goods, with date and time of the document.

• The Roving squad officers, shall not insist on physical copy of these documents, if the person in-charge of a conveyance prefers to show them electronically.

(Source: Instruction / Circular No. GST-15/30/2021-P and  P-CTD dated 15.11.2021  issued by Commissioner of Commercial Taxes, Government of Tamilnadu)

Improvements in GSTR-1 by GSTN

5. An enhanced version of GSTR-1 and IFF has been provided for taxpayers by GSTN portal. These improvements in two phases have commenced with first phase as follows:
   • Re-organized GSTR-1 dash board - GSTR-1/IFF has been grouped in two sections, namely ADD RECORD DETAILS and AMEND RECORD DETAILS.
   • Table / tile document counts - The document count for each tile (table) has been made more informative with color coding. The status of uploaded (Saved, Pending, Errored) documents with their count will also be made available.
   • Enhancement in B2B and CDNR table / tile- Taxpayers will now be able to view a new record details table with the details of the recipient -wise count of records, i.e., taxpayer type, processed invoice, pending / errored invoice etc.
   • Records per page feature for ease of viewing
   • Steps to file GSTR-1 / IFF
5. The next phase of the GSTR-1 enhancement will provide the taxpayers with an enhanced GSTR-1 online summary view, recipient(s) wise summary PDF and remove need of SUBMIT before FILE.

(Source: GSTN)

Improvements in GSTR-1 by GSTN

Steps to file GSTR-1 / IFF

Taxpayer can upload details of outward supplies and file GSTR-1/IFF by following the steps enumerated below:

1. Taxpayer can add or amend records in respective tables of GSTR-1/IFF.
2. Once the records are saved, taxpayer shall click on GENERATE SUMMARY button.
3. After the summary is successfully generated, system will enable PREVIEW and SUBMIT buttons.
4. If the taxpayer intends to verify summary of GSTR-1/IFF, taxpayer can click PREVIEW button to download summary PDF.
5. Taxpayer can make necessary changes before SUBIT/FILE of GSTR-1/IFF. However, if any new records are added after generating the summary, the SUBMIT and PREVIEW buttons will be disabled till a new summary has been generated by clicking GENERATE SUMMARY button after updating records.
6. Taxpayer will also be informed to generate new summary, in case the latest summary is not available/generated.
7. After the changes done in GSTR-1/IFF, taxpayer shall click on Generate summary button and can submit/file GSTR-1/IFF.

(Source: GSTN)

GST Collection for November, 2021

• The gross GST revenue collected in the month of November 2021 is ₹ 1,31,526 crore of which CGST is ₹ 23,978 crore, SGST is ₹ 31,127 crore, IGST is ₹ 66,815 crore (including ₹ 32,165 crore collected on import of goods) and Cess is ₹ 9,606 crore (including ₹ 653 crore collected on import of goods).
• The GST revenues for November 2021 have been the second highest ever since introduction of GST, second only to that in April 2021, which related to year-end revenues and higher than last month’s collection, which also included the impact of returns required to be filed quarterly. This is very much in line with the trend in economic recovery.

(Source: GST Collection Press Release ID1776730 dated 01.12.2021)

Gross GST collection for FY 2020-21 and 2021-22 (till 30.11.2021)

Month	FY 2020-21 (Rs. in crore)	FY 2021-22 (Rs. in crore)
April	32172	139708
May	62151	102709
June	90918	92849
July	87422	116393
August	86449	112020
September	95480	117010
October	105155	130127
November	104963	131526
December	115174	--
January	119875	--
February	113143	--
March	123902	--
Total	1136805	942342

(Source: Press Release ID1776181 dated 29.11.2021)

New functionalities on GST portal

GSTN has made new functionalities available on the portal in November, 2021, which relate to registration, return, refund, appeal etc. Following are some of them:

1. Registration

• Facility to withdraw their application for cancellation of registration, filed in Form REG-16, provided no action has been initiated by the tax officer against their application.
• Now the effective date of suspension of a taxpayer is also displayed on the Portal when his/her profile is accessed using "Search Taxpayer" functionality.

2. EVC facility

• Earlier all taxpayers registered as Companies were mandatorily required to use DSC for all online processes on the GST Portal. Now, the facility of using EVC, in addition to DSC, has been extended to such taxpayers.

3. Refunds

• The text in the undertaking form to be submitted by the taxpayer for issuance of From PMT 03 by proper officer has been amended to include both, credit and cash ledgers for enabling re-credit of inadmissible ITC to respective ledgers.

4. Appeals

• Applicant is now allowed to file Appeal for interest on delayed grant of refund
• The earlier validation on value of the Interest and Penalty amounts to not exceed the claimed amount/amount in the original order, has been removed from the Appeal form APL-01.

5. Enforcement

• In case an order/ rectification order is issued in Form GST MOV 09/11, the description in the liability ledger has now been updated to indicate the Demand Type.
• For cases where the Tax Officer rectifies the demand order (Form GST DRC-07) or issues Rectification/ Withdrawal order (Form GST DRC-08) in transit cases, following functionality has been enabled for the Tax-payers:

• Orders in Form GST MOV 09/11 have been provided with a hyperlink "Request for rectification", by clicking which, the details of relevant order will get auto populated and the taxpayer will be able to choose the reason for rectification and also enter explanatory text against each selected reason, upload attachments, if needed, verify and submit the same.

6. Recovery

•  In view of Notification No. 03/2019-CT (Rate), dated 29.03.2019, which, inter alia, provides for the registered person to file an application in FORM GST DRC-20, seeking extension of time for the payment of taxes or any amount due or for allowing payment of such taxes or amount in instalments in accordance with the provisions of section 80.
• Notification No. 3/2019-CT also empowers the Commissioner to issue an order in FORM GST DRC- 21, allowing the taxable person further time to make payment and/or to pay the amount in monthly instalments, not exceeding twenty-four, as he may deem fit.
• The taxpayers will now be able to file an application seeking extension of time for payment or request for allowing payment in instalments provided the demand is not less than ₹ 25,000.

(Source: GSTN dated 01.12.2021)